Friday, October 28, 2011

Takings Jurisprudence, NIMBYS, and Scalia's Hypothetical Highway

After slogging through the Mahon and Penn Central cases (booorrring), it's always a relief to start talking about Lucas v. South Carolina Coastal Council.  The reason is simple: Justice Scalia knows how to keep us entertained.  In particular, Scalia loves to get sassy in his footnotes.  I'm sure readers have their favorites, but one of mine is footnote 8 of the Lucas opinion, which in addition to being enjoyable, is also very illuminating.  I spend about 20 minutes of class time discussing this footnote and its implications for both takings law specifically and land use law more generally, including the intractable NIMBY problem. 

The basic holding of Lucas is that a state regulation that deprives property of all economic value (i.e., a "total wipeout") is a per se taking, subject to a few caveats and exceptions that I'm not going to get into here.  Footnote 8 takes on Justice Stevens's argument, in dissent, that the "total wipeout" rule is arbitrary because the landowner who suffers a 95% wipeout gets no compensation while the landowner who suffers a 100% wipeout gets 100% compensation.  Scalia's response: that result "is no more strange than the landowner whose premises are taken for a highway (who recovers in full) and the landowner whose property is reduced to 5% of its former value  by the highway (who recovers nothing).  Takings law is full of these 'all-or-nothing' situations."  To illustrate this hypothetical, I draw the following picture on the board:


 I then ask my students the question left unanswered by this hypo: why does Owner "A," whose land is taken for the highway, get full compensation, whereas Owner "B", whose land is substantially devalued by the siting of a highway adjacent to his home, get nothing? 

Continue reading

October 28, 2011 in NIMBY, Property Theory, Supreme Court, Takings | Permalink | Comments (0) | TrackBack (0)

Thursday, October 27, 2011

DC Planning Office Threatens to Limit Georgetown's Enrollment

There's a new skirmish in the on-going battle between D.C.'s private universities and the D.C. planning office over off-campus housing of undergraduates.  (Full disclosure - my former firm represented most of the major D.C. universities, including Georgetown, in land use matters.)  Periodically each university's Campus Plan comes up for review by the city government.  Georgetown's plan is currently under consideration, and according to this editorial in The The Washington Post:

A recommendation by the city’s office of planning would require the university to provide housing for 100 percent of its undergraduate students by 2016; failure to do so would force cuts in enrollment starting in 2015.

Town and gown relations in D.C. have always been fraught, as they are in many places. (For more, see this 2005 Note about litigation against both Georgetown and George Washington.)  D.C. has always had a particularly high concentration of universities, and many students live cheek-by-jowl in apartment buildings inhabited by working adults, families, and retirees, creating potential lifestyle conflicts.  Having both worked for the universities and lived in the George Washington University neighborhood, as well as being both a student and a neighbor to students here in Athens, I don't think the universities in D.C. do any worse job with neighborhood relations than schools anywhere else.  In D.C. it's simply a matter of scale and density. What's interesting here is that the city seems so comfortable attempting to control enrollment, something normally at the university's discretion.

Jamie Baker Roskie

CORRECTION - a previous version of this post had the headline "DC Planning Office Threatens to Limit Georgetown's Employment."  This is what comes of blogging while multi-tasking!

October 27, 2011 in Housing, Local Government | Permalink | Comments (0) | TrackBack (0)

Wednesday, October 26, 2011

Kelo: Not Long for this World?

In recent remarks, Justice Scalia mentioned Kelo v. New London alongside Dred Scott v. Sanford and Roe v. Wade as decisions in which the Court made a mistake of "political judgment," underestimating the extent to which the decision would provoke a widespread public backlash.  I wonder what he would say about the role of Citizens United in sparking the Occupy Wall Street protests.  In any event, Scalia also predicted that Kelo would soon be overruled. 

Hat Tip: ABAJournal.Com

Ken Stahl

October 26, 2011 | Permalink | Comments (0) | TrackBack (0)

"The 19 Building Types That Caused the Recession"

Over at The Atlantic Cities website, I stumbled across this fun little piece,

Among his favorite examples of all the standard real-estate products built ad nauseum across the country over the last half-century, Christopher Leinberger likes to point to the Grocery Anchored Neighborhood Center. This creation is generally about 12 to 15 acres in size on a plot of land that’s 80 percent covered in asphalt. It’s located on the going-home side of a major four-to-eight lane arterial road, where it catches people when they’re most likely to be thinking about what to buy for dinner. . .

Leinberger, an urban land-use strategist and professor at the University of Michigan, includes the Grocery Anchored Neighborhood Center on his list of the 19 standard real estate product types dominant in post-war America. Also on the list: suburban detached starter homes, big-box anchored power centers, multi-tenant bulk warehousing and self-storage facilities. All of these products are designed for drivable suburban communities. They reflect almost exclusively what investors have been willing to finance for the last 50 years. And as construction picks back up following the recession, Leinberger says we'll need to get away from every single one of them.

It's a slightly fancier way to say we must get away from sprawl, but it's certainly food for thought.

And when you're done with that, check out Richard Florida's article "2011's Best Cities for Trick-or-Treating."

Jamie Baker Roskie

October 26, 2011 in Architecture, Community Design, Development, Finance, New Urbanism, Parking, Pedestrian, Planning, Sprawl, Urbanism | Permalink | Comments (0) | TrackBack (0)

Property Theory and Land Use, Part IV

Part I of this series is here. Part II is here. Part III is here.


If, as I discussed in Part II, land use planning and governance serves a truly common good, and not merely individual preferences or collective goods, then a number of important implications follow. In Part III I examined one of those implications, namely that land use planning should consist neither of centralized decision-making nor of purely individual owner sovereignty. Instead, it should involve multiple individuals and associations, both public and private, in collaborative exercises of authority over their respective spheres. Decisions about land use should not be zero-sum games, in which one person’s “good” is sacrificed for some greater “good.” Indeed, because basic human goods are incommensurable, it is nonsense to speak of goods in this way. Finally, I speculated that successful development plans tend to employ this multi-faceted approach.

Another important implication of the common-ness of goods is that the ends for which property sovereigns act—the goods that provide intelligible reasons for authoritative decisions about land use—are good for all and knowable by all. This does not mean that all property sovereigns must or even should choose the same ends. To the contrary, that property enables owner-sovereigns to pursue different goods is one of property’s great virtues. But it does mean that some ends are really good, and other ends are really not good, even evil. Placing a library next to a school promotes the good of knowledge. Placing an adult book store next to a school causes real harm, even if economists cannot measure on any scale the harm caused by the dirty bookstore against whatever good it might achieve.

If this is true then the government’s exercise of its police powers is at once grounded in, and limited by, universally-accessible reasons (what some old-fashioned folks used to call “natural law”). The state cannot simply assert that all of its ends are legitimate. Some ends are rational, and therefore have a plausible claim to legitimacy. Other ends are fully reasonable, and therefore clearly legitimate. Still other ends are simply not intelligible as legitimate reasons for state action.

I recognize that this is an unpopular notion today. But natural law isn’t just for natural lawyers anymore. Prominent liberal jurisprudential thinkers, such as Joseph Raz and Ronald Dworkin, have affirmed the intelligibility of certain basic goods. And the authors of the Progressive Statement began by affirming the incommensurability of certain basic values.

I’ll close this post by tentatively suggesting one state interest that is commonly asserted but is nevertheless not intelligible in itself as a justification for land use decisions. Many land use decisions, including many controversial land use decisions, are justified on the basis of the increased tax revenue that the municipality is convinced will result from the decision. This interest is often asserted as a ground for burdening or infringing the property rights of poor or middle-class property owners, especially in eminent domain actions. But increased tax revenue is not a reason for state action in and of itself; money has no intrinsic value. The tax revenue must be used for something good in order to become valuable. If it is assumed that the municipal government will use the tax revenue for good ends—better educational facilities, public parks and community centers—then the municipality’s real interest is in those more basic ends that (the city hopes )the tax revenue will help secure. But of course, the nexus between the land use decision and those more basic, distant ends is difficult to demonstrate.

Of course, one might observe that this is the very reason we should doubt the prudence of the land use decision in the first place.

Adam MacLeod

October 26, 2011 | Permalink | Comments (0) | TrackBack (0)

Tuesday, October 25, 2011

Georgia Trust Releases 2012 "Places in Peril"

Today the Georgia Trust for Historic Preservation released its 2012 "Places in Peril" list of historic properties under threat. (Historic preservation bufs will note this public relations gambit is not unique to Georgia.) As I expected, UGA's Rutherford Hall appears first on the list.  Rutherford is, as I previously blogged, slated for demolition.  However, several less imperiled, yet possibly more architecturally worthy buildings, such as the Randolph County Courthouse, are also listed.

Built in the 1880's, this masonry courthouse located on the town square of Cuthbert was built in the Dutch Romanesque Style, which is unusual for Georgia. With the construction of a new judicial center for Randolph County, the functions of the courthouse were relocated. The county is working with the architectural firm Lord Aeck & Sargent to redevelop the building as offices for many municipal functions including a welcome center, chamber of commerce, soil conservation lab and event space. The county is performing the restoration in phases, using prisoner labor. The courtroom benches have been restored as part of a rehabilitation program that trains prisoners to refinish furniture.

These lists of endangered properties must have value - I wonder how often a listing like this results in a property being saved.  I don't think there's much hope for Rutherford Hall, though. Despite significant opposition the University seems staunch in its plan to "retrofit" through demolition of the existing building.

Jamie Baker Roskie

October 25, 2011 in Architecture, Georgia, Historic Preservation | Permalink | Comments (0) | TrackBack (0)

Chan, Gedal, Been, & Haughwout on the Role of Neighborhood Characteristics in Mortgage Default

Sewin Chan (NYU Wagner), Michael Gedal (NYU Wagner), Vicki Been (NYU Law), and Andrew Haughwout (Federal Reserve Bank-New York) have posted The Role of Neighborhood Characteristics in Mortgage Default Risk: Evidence from New York City. The abstract:

Using a rich database of non-prime mortgages from New York City, we find that census tract level neighborhood characteristics are important predictors of default behavior, even after controlling for an extensive set of controls for loan and borrower characteristics. First, default rates increase with the rate of foreclosure notices and the number of lender-owned properties (REOs) in the tract. Second, default rates on home purchase mortgages are higher in census tracts with larger shares of black residents, regardless of the borrower’s own race. We explore possible explanations for this second finding and conclude that it likely reflects differential treatment of black neighborhoods by the mortgage industry in ways that are unobserved in our data.

Matt Festa

October 25, 2011 in Local Government, Mortgages, New York, Race, Scholarship | Permalink | Comments (0) | TrackBack (0)

Property Theory and Land Use, Part IIIa

Public Discourse today is running an essay that I penned about the institution private property and the ways in which it promotes human flourishing. In that essay I explore the debate that I summarized here two weeks ago. Further, I respond to the authors of the Progressive Statement and point out some things that I believe they overlooked.

Adam MacLeod

October 25, 2011 | Permalink | Comments (0) | TrackBack (0)

Monday, October 24, 2011

Lawrence Summers on How to Stabilize the Housing Market

Lawrence Summers (former Treasury Secretary, Harvard President, and Obama advisor) has posted a Washington Post op-ed called How to Stabilize the Housing Market. From the article:

The central irony of a financial crisis is that while it is caused by too much confidence, borrowing and lending, and spending, it can be resolved only with more confidence, borrowing and lending, and spending. This is true, above all, of housing policies. Fannie Mae and Freddie Mac, government-sponsored enterprises (GSEs) whose purpose is to mitigate cyclicality in housing and that today dominate the mortgage market, have become a textbook case of disastrous and pro-cyclical policy.

Summers notes that the housing market is key to the economy, and makes several substantive recommendations, including:

First, and perhaps most fundamentally, credit standards for those seeking to buy homes are too high and too rigorous. The characteristics of the average successful applicant in 2004 would make that applicant among the most risky today. The pattern should be the opposite, given that the odds of a further 35 percent decline in house prices are much lower than they were at past bubble valuations.

Matt Festa

October 24, 2011 in Federal Government, Finance, Financial Crisis, Housing, Real Estate Transactions | Permalink | Comments (0) | TrackBack (0)

Sunday, October 23, 2011

Seicshnaydre on Public Housing and Racial Segregation in Post-Katrina New Orleans

Stacy Seicshnaydre (Tulane) has posted How Government Housing Perpetuates Racial Segregation: Lessons from Post-Katrina New Orleans, 60 Cath. L. Rev. 661 (2011). In it, she explores how quantity-minded public housing advocacy and NIMBY-style public housing resistance has combined to perpetuate the racial segregation that federal law prohibits. Here's the abstract:

This Article contends that post-Katrina New Orleans exemplifies the exclusionary dynamic in which government-assisted housing operates throughout America and the fundamental failure of American housing policy at the federal, state, and local levels to prevent the racial segregation that inevitably results. Federal law has prohibited racial segregation in government-housing programs for decades, yet it has proven difficult to reverse entrenched patterns of segregation in these programs. Patterns of racial segregation have been particularly intractable in New Orleans, which, prior to Hurricane Katrina in 2005, boasted the second-highest level of poverty concentration in the nation and relatively high levels of poverty concentration in all of the major government-housing programs. Furthermore, low-income white residents in pre-Katrina New Orleans had greater access to middle-income neighborhoods throughout the metropolitan area of New Orleans than low-income black residents, who were overwhelmingly concentrated into high-poverty neighborhoods.

Hurricane Katrina, with its massive levee failures and neighborhood flooding, offered an opportunity for New Orleans to emerge as a more inclusive region; new government-assisted housing could have helped facilitate inclusion, while also responding to the regional-housing needs of the area. However, rental housing bans proliferated throughout the region, primarily in communities that had previously served as affordable suburban alternatives for lower- and middle-income whites in prior decades. These communities sought not only to prevent the development of new rental housing, but also to limit the repair of rental housing that preexisted the storm. At the same time, other communities in metropolitan New Orleans that were the least affordable, most homogeneous, and nationally recognized as desirable places to live were not targeted for government-assisted housing, and thus did not pass similar sweeping rental bans. Therefore, rather than using recovery efforts to reverse racially segregated housing patterns, the region took steps to exacerbate them.

This Article describes a perennial dynamic of two impulses pulling in opposite directions—the anywhere-ist and nowhere-ist impulses, which conspire to perpetuate segregation. The anywhere-ists are primarily focused on securing as much federally assisted housing as possible; the nowhere-ists are primarily focused on keeping it out of their communities. This dynamic has created a “path of least resistance,” whereby government-assisted housing continues to be provided in places where it already exists or in places that are already open and affordable.

Ultimately, federal intervention in the housing market must encompass more than providing a subsidy. It must open neighborhoods not already open, make affordable what is not already affordable, enable housing subsidies to act as gateways to educational and employment opportunity, and inform families historically excluded from housing markets about their choices. Any federal housing interventions that are not so designed will almost certainly exacerbate existing racial segregation and poverty concentration, as they have done for decades, and—as post-Katrina New Orleans illustrates—as they will continue to do, again and again and again.

Jim K.

October 23, 2011 in Affordable Housing, Housing, HUD, NIMBY, Race, Scholarship | Permalink | Comments (0) | TrackBack (0)